UK house prices to fall for first time since 2009 after vote

London properties are taking longer to sell this month, despite a summer price cut, as uncertainty surrounding how Britain will negotiate its exit compounds the dampening effect of the holiday season. Photo: PA

Home values in London will fall for the first time since 2009 next year, hit by uncertainty resulting from the vote to leave the European Union, according to Countrywide Plc.

Price growth for homes in the capital will slow to 3.5pc this year and drop by 1.25pc in 2017, the country's largest real estate broker said in a report yesterday.

Countrywide in December forecast that values would increase by 4pc this year and next. Prices for properties in prime central London will drop as much as 6pc this year and be little changed in 2017, the report showed. "The vote to leave the European Union has unsettled the UK economy," Countrywide chief economist Fionnuala Earley said.

Lower expectations of capital gains were already weighing on London's housing market, she said, while the luxury property market was being hurt by increased sales taxes and oversupply. "The Brexit scare has just accelerated all of that," she said.

London properties are taking longer to sell this month, despite a summer price cut, as uncertainty surrounding how Britain will negotiate its exit compounds the dampening effect of the holiday season.

Homes in the UK capital are staying on the market for five days more than in May, the month before Britons voted to leave the EU, property website Rightmove said.

The lull won't last, however. Countrywide expects Greater London home values to rise by 2pc in 2018 as the economy improves and there is more clarity about leaving the EU, according to Ms Earley. Average UK prices are set to drop 1pc next year before returning to growth in 2018, according to the report. (Bloomberg)